"While investors’ first reaction was negative, we believe the initial FY16 'guidance' is very preliminary and conservative. The initial mgmt. view for the current FY15 called for rev growth of ~50%, and we are now modelling 68%," writes UBS, reiterating a Buy on Workday (NYSE:WDAY) post-earnings.

The firm also thinks Workday's FQ4 outlook is conservative, and is forecasting FQ4 revenue $2M above the high end of Workday's guidance range. "FY16 looks to be a strong year for Fin’l Mgmt pdts, helped by Insight analytic apps [becoming generally available]. Europe has been a bit slow due to (1) entrenched competitors and (2) sales org. changes early in the yr, but should improve next yr."

Canaccord (Buy) also isn't worried about the FY16 commentary ... for now. "If you dig into the numbers, the fact that WDAY intends to run its OpEx based on 40% revenue growth seems more like a conservative way to manage expectations than a statement of concern about the pace of business."

Summit Research (Hold) is more cautious, noting Y/Y deferred revenue growth slowed to 8.3% in FQ3 from FQ2's 15.7% and FQ1's 19.7%. "We would expect deferred growth to at least match or exceed revenue growth in a SaaS business model like Workday’s."

Wedbush (Outperform) thinks large deal activity was "more muted" in FQ3. But it's "optimistic about the [FQ4] contracting and large deal outlook, as our checks indicate that WDAY integrators are heavily loaded with projects and prospects, and Y/Y billings comparisons don't look overly difficult."

Several targets have been cut, but that might have as much to do with Workday's YTD performance as anything else.

Workday (NYSE:WDAY) is guiding for FQ4 revenue of $219M-$222M, +54%-56% Y/Y and in-line with a $220.5M consensus. That isn't being received well, given Workday's history of providing above-consensus guidance.

Low expectations and a high short interest (11.9M shares as of Aug. 15) are proving a good mix for Veeva (VEEV+18.1%) following its FQ2 beat and guidance hike. Several firms have raised their targets.

Workday (WDAY+5.5%), which sold off yesterday (and took peers down with it) following its FQ2 report, is following Veeva higher. As are Veeva partner Salesforce (CRM+2.1%) and several other cloud software names. NOW+2.9%. CTCT+3.4%. JIVE+2.5%. CSOD+2%. ULTI+1.9%. MKTO+1.9%.

"We like [Veeva's] momentum with new products, the pace of customer deployments, and view the second-half guidance as likely conservative," says Deutsche (Buy).

Pac Crest (Outperform) likes the fact Veeva's billings and subscription revenue each rose over 60% Y/Y, and that its large deal activity also grew. It sees a $5B addressable market for life sciences CRM/content management software.

Workday (WDAY-4.7%) has received several target hikes after beating FQ2 estimates and upping its FY15 (ends Jan. '15) guidance. But there have also been some cautious notes focused on cloud HR/financial software giant's valuation.

Citi observes Workday trades at 15x 2015E sales, and says it has trouble seeing upside catalysts at current levels. Goldman points out Workday is trading at 11x estimated enterprise value/billings even if its upside scenario plays out.

Cantor (target raised to $121) sees several reasons to be bullish. Among them: The ramp of Workday's recently-launched recruiting product; the pending launch of Workday Student; an enterprise software upgrade cycle; strong international growth (echoes of Salesforce); and expected announcements at the November Workday Rising conference.

Wedbush (target raised to $106) expects new big data/analytics products to be shown off at the conference. It also sees room for a fresh guidance hike in 3 months, though it thinks it might be smaller than yesterday's hike.

Workday used its CC (transcript) to hike its FY15 billings guidance by $50M to $940M-$960M (above revenue guidance of $760M-$770M). FQ3 billings guidance is at $225M-$230M (above revenue guidance of $200M-$205M).

Ultimate Software (ULTI+7.4%) beat Q2 estimates on the back of a 26% Y/Y increase in recurring revenue (84% of total revenue). The cloud HR software vendor also disclosed on its CC (transcript) it added three new enterprise clients with 10K or more employees; the largest has 40K.

Full-year guidance for 23% revenue growth (25% recurring growth) has been reiterated. Q3 guidance for revenue of $127M is roughly in-line with a $127.3M consensus.

A number of cloud software peers have also rallied. Cloud HR/talent management peers Workday (WDAY+6.5%) and Cornerstone OnDemand (CSOD+5.1%) are among the biggest gainers, but others are also doing quite well. CRM+2.7%. NOW+4.7%. LPSN+5.3%. MKTO+4.1%. CNQR+4.8%. JIVE+3.6%. N+4.2%.

Workday (WDAY) expects FQ2 revenue of $173M-$178M and FY15 (ends Jan. '15) revenue of $730M-$750M. The former is above a $171.5M consensus, and the latter is both up from a prior $710M-$740M and favorable at the midpoint to a $735.4M consensus.

FY15 billings guidance has been hiked by $40M to $890M-$910M. Thanks to "several new large customers," FQ1 billings totaled $208M (+94% Y/Y), above revenue of $159.7M and blowing past guidance of $165M. FQ2 billings are expected to be down Q/Q.

Plenty of enterprise software names have underperformed on a down day for tech stocks after VMware (VMW-9.2%) provided soft bookings numbers (sub-10% Y/Y growth in the Americas, EMEA, and Asia-Pac), and blamed it on delays in signing major enterprise licensing deals (ELAs) as it talks with clients about more expansive agreements.

Nomura (Buy) observes that while VMware reported 18% Y/Y billings growth, underlying growth may have been in the single digits after accounting for the AirWatch deal and other adjustments. Nonetheless, it thinks ELA weakness might be a seasonal issue that will correct in Q2.

Is competition taking a toll? In spite of the soft bookings figures, VMware managed to report strong licensing activity for products other than its core vSphere server virtualization platform, and noted on its CC (transcript) solutions other than standalone vSphere made up over 45% of license bookings (up from 30%+ a year ago).

Microsoft's Hyper-V has been gradually eating into vSphere's market dominance. Other cheaper alternatives such as the open-source Xen (backed by Citrix) and KVM have also been gaining ground.